While there is certainly no softening among lodging executives’ sentiment, the National Association of Purchasing Management reported that its index of manufacturing activity (a lagging economic indicator) fell to 41.2 in January, the lowest since March 1991. A reading below 42.7 generally corresponds with a contraction in the economy overall. The Conference Board reported that its Consumer Confidence Index dropped more sharply than anyone was expecting. The index fell from 128 in December to 114 in January. This is this index's lowest reading since 1997. The above data is not final proof of a recession, but Mr. Greenspan will likely take further swift action by lowering interest rates again. One wonders why, the LESI, a leading economic indicator, is so positive? “Do we know something they don’t,” said one industry executive.

Fifty nine (59%) percent rated future business conditions as going to be better in 12 months with thirty seven (37%) rating the future as the same. Only three (3%) percent of the executives surveyed rated future conditions as being worse. Fifty six (56%) percent of the lodging executives rated the current business as “good,” compared to forty four (44%) percent rating conditions as normal or neutral.

The LESI, created by LodgingForecast.com, tracks on a month-to-month basis a current business conditions metric and a 12-month outlook for the lodging industry. The LESI is a nationwide poll of lodging industry executives in operations, finance and development, and marketing who represent all segments of the lodging industry.
 

About the Index

Created by researchers at LodgingForecast.com, the LESI tracks on a month-to-month basis a 12-month outlook for the lodging industry. The LESI is a nationwide poll of lodging industry executives in operations, finance and development, and marketing who represent all segments of the lodging industry. LodgingForecast.com holds its executives’ responses in strictest confidence; only the final summary analysis is reported, and the summary analysis encompasses upwards of 1.2 million hotel rooms.

Following the Purchasing Managers Index method of tracking leading indicators, the LESI satisfies the need for real-time information for executive decision making in the lodging industry. The LESI is a leading indicator based on opinions of lodging executives. Under development since June 1999, the LESI is a diffusion index--a convenient summary measure showing the prevailing direction of change and the magnitude of change for the Lodging Industry. 

LodgingForecast.com is a division of the consulting firm evanjoeray, LLC which publishes several lodging related indicators each month.